FG directs presidential task force to raise N4trn bond for power sector debts

President Bola Tinubu has authorised the Presidential Power Sector Task Force to raise N4 trillion through a bond programme aimed at settling verified legacy debts in Nigeria’s power sector.

This is part of ongoing reforms to stabilise the country’s unstable power supply.

Speaking during his Democracy Day address on Friday, Tinubu explained that the initiative is being driven through the presidential task force.

According to him, the task force had been mandated to address long-standing liquidity challenges in the electricity value chain, including unpaid obligations that have weighed on generation and distribution companies.

“By 2023, when we came on board, the electricity sector was characterised by chronic generation shortfalls, an unreliable gas supply, and transmission infrastructure so fragile that it could not evacuate available power,” he explained.

Tinubu said that the distribution companies were burdened by massive losses and a metering deficit of over four million. He stressed that the value chain was drowning in legacy debt.

“The result was a sector that generated less than the 13,500 megawatt installed capacity, a sector that transmitted less than it generated, distributed less than it transmitted and collected revenue far below what it needed to sustain itself.”

Tinubu said he signed the Electricity Act into law to decentralise the power sector, allowing states to participate in generation, transmission and distribution.

“The Presidential Power Sector Task Force is working hard to reduce the metering deficit. It has also been authorised to raise N4 trillion bond to settle verified legacy debts,” he added.

According to the president, the Rural Electrification Agency, with support from the World Bank and the African Development Bank, was expanding off-grid and mini-grid projects to underserved communities, including schools, markets and healthcare facilities.

The President said electricity remained central to Nigeria’s economic development and must be treated as a democratic dividend, stressing that “electricity is a democratic dividend we owe every Nigerian. We intend to deliver it.”

He said that the reforms were designed to attract investment into the sector and improve the overall reliability of power supply.

For him, the administration remained committed to repositioning the sector to support industrial growth, job creation and economic competitiveness.

The President’s Democracy Day announcement comes after Adebayo Adelabu, former power minister, revealed last year that the federal government signed a N4 trillion bond to clear verified debts owed to electricity generation companies and gas suppliers as part of efforts to stabilise Africa’s most populous nation’s power sector.